What is the CGAP-Ford Foundation Graduation Program?

The CGAP-Ford Foundation Graduation Program is a global effort to understand how safety nets, livelihoods and access to finance can be sequenced to create sustainable pathways for the poorest out of extreme poverty. Since 2006, the Graduation Program has partnered with local organizations and governments to adapt the approach in 10 pilot projects in eight countries. A unique element of the Graduation Program is that a robust learning and evaluation agenda, including qualitative research and randomized controlled evaluations, is embedded in all the pilot sites. The Graduation Program is committed to sharing lessons on implementation and results of research through an active Community of Practice of practitioners, policymakers, funders, and researchers dedicated to dramatically scaling up solutions that help end extreme poverty.

What is the Graduation Approach?

The Graduation Approach is an interdisciplinary methodology that targets the extreme poor with the goal of moving them out of extreme poverty in a sustainable and time-bound manner, adapting a method originally developed by BRAC in Bangladesh.

The Graduation Approach:

• Draws on the most relevant aspects of social protection, livelihoods development, and access to finance to deliver results;

• Combines support for immediate needs with longer term human capital investments, thereby protecting participants in the short-run while promoting sustainable livelihoods for the future;

• Purposefully targets the extreme poor—people at the lowest level of the economic ladder, who usually have few or no assets and are chronically food insecure;

• Focuses on five “building blocks”: targeting, consumption support, savings, an asset transfer, and skills training and regular coaching.

What does “graduation” mean?

Graduation refers to the move out of extreme poverty and into food security and sustainable livelihoods. Criteria that indicate people are ready to graduate are context-specific, but usually include measures of nutrition, stable and diversified incomes, increased assets, better access to healthcare and education, and improved self-confidence. These criteria are used to assess not only the status of an individual at a specific point in time, but also aim to incorporate a predictive measure of resilience to future shocks.

What is the development problem addressed by the Graduation Approach?

Although the extreme poor are those most in need, they are often, if inadvertently, overlooked by many development interventions. With a few notable exceptions, both microfinance and livelihoods programs typically do not reach the extreme poor. While social protection programs have a better track record of reaching the extreme poor, they often lack clear and sustainable exit strategies. As more emerging countries graduate to middle-income status, a deliberate focus on the poorest will likely be necessary not to leave behind pockets of poverty.

Who are the extreme poor?

The extreme poor are the people among the bottom 50 percent of those living below national poverty lines. At the global level, they are often considered those living with less than $1.25 a day, estimated in 2012 to be nearly 1.2 billion people. They tend to be food insecure, have poor health, lack education, usually have few or no assets, and are limited in their livelihood options. They also tend to be socially excluded and lack in self-confidence or opportunities to build the skills and resilience necessary to plan their own future.

How and where has the Graduation Approach been implemented?

The approach, originally designed by BRAC in Bangladesh, was pilot-tested in 10 sites in eight countries (Ethiopia, Ghana, Haiti, Honduras, India, Pakistan, Peru, and Yemen) between 2006 and 2013. In each site, an alliance of partners implemented the approach including a mix of livelihood NGOs, foundations, financial service providers, and government social protection programs. A total of 5,376 participants were reached during the pilot phase. Six pilots have been completed to date.

How much does it cost?

The total cost of running pilots varied from about $330–$650 per participant in India to about $1,900 in Haiti. Costs include consumption support, asset transfer, all staff costs, monitoring costs, and head office overhead. Differences in price range between the pilots stem mainly from local cost-structures (e.g., local salary scale, population density, and status of infrastructure), and emphasis placed on each of the building blocks (e.g., size and duration of consumption support). The upfront investment required by the Graduation Approach is high, but some economies of scale take effect when programs start scaling up.

What are the results of the Graduation Program so far?

After 18 to 36 months, between 75 and 98 percent of participants met “graduation” criteria with regards to nutrition, assets and social capital, as specified by each program. Findings from randomized controlled evaluations assessing the impact of the graduation pilots in India, Honduras and Pakistan show improvements in the lives of the extreme poor, in all but one site. In particular, participants became more food secure, stabilized and diversified their income, increased their assets and savings, and noted an improvement in their health. Reported “happiness” increased in the two sites where it was measured (Honduras and West Bengal). These indicators of hope, self-confidence and orientation toward the future may be one of the keys to unlocking poverty traps.

Can the Graduation Approach be scaled?

Pilot projects are scaling up: five pilots (Haiti, three in India, and Pakistan) are already reaching over 20,400 new participants. Development partners like The Ford Foundation, The MasterCard Foundation, Trickle Up, and others have stepped in to scale up the programs in Haiti and India, while the Pakistan Poverty Alleviation Fund has reached over 40,000 households with a streamlined version of the approach. In India, Axis Bank, a private sector player, has partnered with Bandhan with the goal of reaching 55,000 new extreme poor households by 2015.

Several governments – Colombia, Haiti, Peru, and Kenya, for example – are keen to explore how the Graduation Approach can be integrated into their social protection programs. Donors such as the Asian Development Bank, DFID, IFAD, UNHCR, and World Bank, as well as international NGOs (Concern, CARE and others) are also interested in rolling out the Graduation Approach as a new way of working with the extreme poor.

Contact Us

For more information, please contact Syed Hashemi or Aude de Montesquiou.

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